The price of vitamins is diversified, with the markets mainly following the price of vitamins A, C and E.
The US dollar has strengthened against the Chinese yuan, offering short-term relief to buyers denominated in US dollars, said Stefan Schmidinger, partner at Kemiex.
The yuan recorded its worst month since August 2019 in March, according to Reuters, as expectations of a rapid economic recovery in the United States and rising US Treasury yields supported the dollar.
However, several investment banks believe that the long-term weakness of the US dollar will continue, driven by fundamentals; some of these financial institutions expect the currency pair to even reach levels of 5.60-6.05 in the medium term, Schmidinger commented.
Manufacturing in China: Do Higher Prices and Earnings Mean Higher Profits?
The Fufeng Group, one of the world’s leading producers of amino acids, has just released its financial results for 2020, offering an update on the situation of Chinese manufacturers, Kemiex said. The Chinese company’s revenue increased + 3% to $ 2.5 billion, but gross profits fell -14% to $ 430 million due to the rising cost of corn inputs and others. Its lysine and threonine businesses recorded strong revenue growth of + 86% to US $ 148 million and + 7% to US $ 195 million respectively. Sales of other key products: MSG was US $ 1.1 billion (-7%), starch sweetener US $ 212 million (-15%), xanthan gum was US $ 125 million (-8%) and other amino acids to US $ 144 million (+ 17%).
Markets are also seeing two major expansion plans for lysine by Meihua and Yuxing Biological, adding up to 500,000 tonnes of annual capacity when completed, while Nenter is finalizing a 900-tonne API and intermediary project, increasing annual production by 250 tonnes, Schmidinger noted.
On the regulatory side of food additive developments, we see the European Food Safety Authority (EFSA) conclude that vitamin B2, produced by Guangji Pharmaceutical, lacks data regarding its toxicological profile. The agency based in Parma latest opinion on safety and efficacy shows that the substance has met the standard for other parameters, however. Vitamin B2 cannot currently be imported from China and marketed in the EU, although EFSA has already adopted several opinions.
In mid-March, China’s Inner Mongolia region released a new sustainable energy policy that garnered serious attention and reduced exploitation rates among some major producers of lysine, threonine and APIs, Kemiex reported. . “The province is home to energy-intensive sectors and wishes to transform its energy uses, leading to a reassessment of existing means of production and, from 2021, the end of new approvals for high-energy industries such as charcoal, calcium carbide , PVC, ammonia (urea), methanol, ethylene glycol, caustic soda and sodium carbonate. “
Notable Chinese Supreme Court ruling on trade secret violation removes 10% of global supply of vanillin, a common flavor enhancer, as large producer has to pay compensation and stop production, the Swiss platform said . “It comes a month after DSM won a patent case against Anhui Tiger related to the synthesis of biotin, or vitamin B7 or H, and could signal serious crackdown on infringement of intellectual property rights (PI ). “
Kemiex has published the fourth volume of its Global Trade Analysis, focusing on imports of vitamins B1, B6 and B12 to Europe and the United States. In previous reports, the company analyzed an increase in vitamin C imports to the United States in the first half of 2020, an increase in methionine imports from China and Malaysia, as well as a lot of strategic pricing information. , shopping centers and import models from EU countries. and for a range of vitamins and amino acids.
Suez Canal incident worsens reliability of timetables
Kemiex also assessed the impact of the accident on March 23, in which the Ultra Large Container Vessel (ULCV), the Ever Given, blocked the Suez Canal in Egypt, creating a long bottleneck. for sea transport between Asia and Europe, as well as the east coast of the United States. A successful rescue mission freed the ship on March 29, faster than expected, and the congestion of up to 400 ships was cleared within a week.
“Our customers have reported ripple effects such as canceled crossings as ships could no longer meet their round trip schedules, but overall the damage to our areas [feed and food additives and pharma ingredients] was rather limited,“Schmidinger told us.
Meanwhile, another mega container ship, MSC TINA, collided with a jetty on March 27 at the port of Ambarli, Turkey, with the vessel sustaining significant damage as a result of the incident.
Pushed by the blockade of Ever Given, supply chain officials are looking beyond ocean freight, and once again to freight train services between China and Europe, which cost less than the plane but transport cargo faster than sea, Schmidinger reported.
Even without the Suez Canal incident, the reliability of carriers’ schedules remains the lowest recorded for a month of February at 34.9%, an average delay of 6.8 days, according to number 115 of the Global Liner report. Sea-Intelligence performance, he said.
“Surprisingly, the Suez incident had no visible impact on freight rates, which remain at high levels. month,”said the representative of Kemiex.